Weekend Argus (Saturday Edition)
Over 50% of NPOs legally non-compliant
Community Chest reveals of about 155 000 charities, 86 000 don’t conform to regulations
MORE than half of South Africa’s non-profit organisations are not compliant with legal and financial requirements, according to Community Chest, which raises funds for grassroots projects.
Community Chest chief executive Lorenzo Davids said there were “approximately 155 000 non-profits in the country, but 86 000 are non-compliant”. “They shouldn’t really be getting funding but they’re still operating. In any other industry a commission of inquiry would be launched.
“We cannot go on serving with integrity if over 50% of the agencies in the sector are non-compliant with the legal and financial requirements.”
Davids raised the matter in an interview with Weekend Argus about Community Chest’s 90th anniversary this year. He said they recently raised R60 million to support at least 300 organisations.
“We check the finances, meeting minutes, expenditure, deficits and the reason for those deficits, as well as the projects and programmes that were launched,” he said.
“There are many other standards that the organisation must meet and maintain. A due diligence certificate is issued if the organisation is compliant. We would like to create this as an industry standard.
“When a donor sees that this organisation has been vetted by us they can trust that they’ve gone through a rigorous vetting process.”
Davids said Community Chest also conducted site visits to NGOs that received funding from them.
He said this was important as annually at least R60bn was donated to charities. Coupled to this, an additional 35 000 unregistered NGOs also collect donations from the public.
This called for “greater accountability and greater regulation” said Davids.
“The development narrative has become stuck on the notion that as long as you do good, it’s okay. Too many NGOs are unqualified to tackle the deeprooted issues in our society,” he added.
“Instead of aiming for the low-hanging fruit that’s easy to sell to funders, they need to tackle the tough problems which ultimately can make a longer lasting and sustainable difference.”
Funders meanwhile were becoming impatient with projects that did not work or have little impact and want instead to put their money where real change will happen.
“There is enough money in the donor community but there are too many NGOs that have blunted the process. Donors are not fatigued; they are simply smart,” said Davids.
“Donors are more selective with who they are funding. They have read many proposals and have garnered experience in knowing what works and what doesn’t.
“If NGOs are more open to constructive criticism there would be more successful feedback for proposals, and pro- jects would be of benefit.”
Davids advised NGOs to avoid telling a donor “how bad things are without a solution”.
He said, “never flood them with paper”.
“Talk to them about real people. People respect you when you respect their resources and time is one of their resources.”